Oil prices rise after dip in US crude production

INQUIRER FILE PHOTO

NEW YORK, United States—World crude prices rose modestly Tuesday as traders eyed signs of slowing US oil production that could ease the global oversupply.

US benchmark West Texas Intermediate for delivery in October rose 59 cents to $44.59 a barrel on the New York Mercantile Exchange.

In London, Brent North Sea crude for October, the international benchmark, closed at $46.63 a barrel, up 26 cents from Monday’s settlement. The futures contract expired Tuesday.

Matt Smith of Clipper Data said the bump-up in prices was due to the US Department of Energy’s report Monday showing “some drop” in US oil production. “It’s showing that this trend is entrenched.”

The market was awaiting the DoE’s weekly US petroleum inventories report due Wednesday that was expected to show crude oil stockpiles grew for a third straight week.

According to a poll of experts by Bloomberg News, the consensus estimate is for a gain of 1.75 million barrels in the week to September 4.

Smith said the market was going to be “very choppy from here on” as traders awaited the Federal Reserve’s interest rate decision on Thursday.

A raise in the benchmark federal funds rate from zero, where it has been pegged since 2008, could boost the dollar, making dollar-priced crude oil more expensive in other currencies and possibly weighing on demand.